AIDX

20/20 Biolabs is a pre-scale diagnostics micro-cap whose story (AI-powered OneTest MCED and newly launched OneTest for Longevity) runs far ahead of its economics. FY2025 revenue was just $2.05M (+16.7% YoY) against a $3.74M net loss and negative $1.92M of operating cash flow. Gross profit is a token $605K on a 29.6% gross margin, so even before overhead each dollar of revenue barely contributes — operating margin is -162.9%. This is a company that has to fund essentially its entire cost structure with outside capital, and the cost structure dwarfs the top line.

The balance sheet is where 'avoid' becomes unavoidable. Stockholders' equity is negative (-$19.2K) after total liabilities nearly doubled (+99.9%) to $4.16M, while cash fell 42.5% to $1.03M — less than one year of runway against the current burn, with current liabilities ($2.46M) already exceeding current assets ($1.47M) for negative working capital. The accumulated deficit is -$33.2M against a $6.42M market cap. Management is plugging the hole with the worst kind of financing for common holders: February 2026 saw a second bridge closing (a secured convertible note plus warrants) and creation of Series E convertible preferred stock that ranks senior to common on dividends and liquidation, accrues a 9% preferred return (stepping to 15% on any event of default), compounds daily, and can be paid in yet more preferred shares. Secured debt, convertibles, warrants and a senior preferred stack all sit ahead of the common — dilution and structural subordination are effectively guaranteed.